An $8,000 demand loan at a fixed rate of 10.5% was advanced on May 10. A payment of $2,000 was made on July 15 and a final payment was made on Sept. 5. What was the size of the final payment?
A) $6,241.64
B) $6,243.92
C) $6,363.61
D) $6,151.89
E) $8,152.90

Question

Quizplus · Accepted Answer

The interest for the first period (May 10 to July 15) is calculated on $8,000. After the $2,000 payment, the interest for the second period (July 15 to Sept. 5) is calculated on the remaining balance. The final payment includes this remaining balance plus the accrued interest.

An $8,000 Demand Loan at a Fixed Rate of 10